Gillard defends lost tax cuts

Prime Minister Julia Gillard has scored a victory in bringing Queensland into Labor's scheme to care for the disabled, but copped a new attack over scrapped tax cuts.

Ms Gillard and Liberal National Premier Campbell Newman signed a $4.2 billion deal to deliver the DisabilityCare Australia scheme to almost 100,000 Queenslanders, leaving Western Australia and the Northern Territory the only jurisdictions outside the system.

Mr Newman was effusive in his praise for Ms Gillard, who will next week introduce laws in parliament to raise the Medicare levy to help pay for the scheme.

"I want to thank the prime minister for making the decision on the levy," Mr Newman told reporters in Brisbane on Wednesday, adding it had been a "big decision".

Ms Gillard said there was now "momentum" for WA and the NT to sign up to the scheme, although WA indicated it wouldn't discuss an agreement until after the federal election, which Labor could lose.

However, the Queensland deal was overshadowed after Labor confirmed it planned to "defer" $1.4 billion in tax cuts due in 2015 in next week's budget.

The tax break was part of the household compensation package to offset price increases flowing from Labor's carbon pricing regime.

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But after the recent slump in the international carbon price, the government says the impact on hip pockets two years from now will be much less than expected.

"Because it's less, there is no need for that new stream of assistance," Ms Gillard said.

However, if the carbon price rose, the government could revisit the tax cuts.

Opposition Leader Tony Abbott said Labor couldn't be trusted after it confirmed earlier this week it would dump a $1.8 billion promise to increase a family tax benefit, which was also announced in last year's budget.

"The essential point that the Australian people are coming to understand is this - if you couldn't trust last year's budget, why should you trust this year's budget?" he told reporters in Sydney.

Mr Abbott also said the plan to link Australia's carbon price to the European market-based emissions trading scheme in 2015 made domestic economic policy hostage to Europe.

But Ms Gillard said families had already benefited significantly from Labor policies.

"We are very mindful that for many Australian families it isn't easy to make ends meet," she added.

Labor has delivered $2500 in assistance and tax cuts to families earning $130,000 a year, and recent drops in interest rates meant a saving of $5500 a year on the average mortgage.

Economist Saul Eslake said the decision to dump the 2015 tax cuts made sense, because government revenues would be lower than expected and the money would not be available to pay for the cuts.